How to Solve Healthcare: Focus on Coverage, Cost & Cure

We don’t have a good answer for how to solve healthcare in America. Let’s start there. Every interest group sees the problem differently, depending on immediate interests, learned perceptions, or advertised distortions. But the fact is, every interest group has some overlap with others, and there is a lot of common ground to be had, if we put ideology aside and try to focus on the problem itself.

The problem is severe enough that neary 50 million people are without healthcare coverage, and another many millions are underinsured, not guaranteed to have necessary treatments covered, for one reason or another. Some blame malpractice insurance costs, some blame pharmaceutical drug costs, some blame malpractice lawsuits, some blame greedy insurers, greedy doctors, or stingy public-funding programs. And they are all right. But the one group that is not ripping anyone off and that has no interest in costs continuing to escalate, is the average patient.

Others fall into the category of innocents, but we have to recognize that the average person has zerocontrol over these egregious failings of the system and does not want to see them prolonged. Now, how to do we get everyone covered, and how to we bring down costs? Both of these things have to happen, if the system is to work for everyone and be solvent, whether it is majority private, majority public, or one or the other entirely.

1. The first thing that will help us on both these points is to recognize how they are connected. If we get everyone covered, costs will come down. Why? Because risk is spread over a broader population. And because healthcare providers know they will be paid, which keeps prices more reasonable, more relevant to supply and demand and not distorted by the chaos of a failed system.

2. Getting everyone covered requires mandates. Someone has to be forced to follow a new regulation. Insurers have to be barred from denying coverage, period. It may be necessary to mandate that individuals and/or businesses pay to be covered.

3. There will have to be government assistance, because the laws of the marketplace dictate that what people cannot afford, they will avoid, like paying exorbitant insurance costs, “reset” adjustable rate mortgages or high-interest credit cards. Subsidizing individuals’ and/or small businesses’ purchase of health insurance, to ensure that everyone is covered, will help lower costs; it is not money wasted, and it is NOT “socialism”.

4. Healthcare spending is an investment. Whether it’s public money or private, spending now to make sure healthcare works for everyone is cost-effective, because it prevents massive entitlement programs from spinning out of control and bankrupting our economy, in the medium to long-term.

5. The First Amendment must stand. (It may be surprising that this is relevant, but it is.) The First Amendment states that “Congress shall make no law … abridging … the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” We cannot strip citizens of their existing right to sue, and we cannot pass laws saying citizens don’t have a right to be heard in court on a given issue. That is not the solution. Laws that limit or dictate the forum for resolving negligence claims, as a matter of definition, “abridge” the right to seek redress for grievances, so the issue of “damages” claims needs to be dealt with elsewhere. There are important reasons why the First Amendment maintains not ony the vitality of our democracy, but also the ability of our population to adjust to change, correct the mistakes of the powerful and engineer a better future. Lessened redress for grievances means more impunity, and that can be measured in losses we are not likely prepared to stomach. We need to remember that each of the rights embodied in the Bill of Rights has a unique function in allowing citizens to exercise control over government policy or action. If there is an abundance of grievance claims, then perhaps the system is in grave disarray. Burying the claims does not fix the problem.

6. The law of the marketplace would be that only by expanding your insuree pool can you really minimize risk in a true insurance company. To rule out providing insurance means you are not an insurance company, but something else. One way to reduce medical malpractice claims is to reduce the insurers’ ability to deny treatment, a practice which can lead to complications, mistakes, chronic inefficiencies in the system that invite further lawsuits. Lawsuits, of course, also incentivize extreme “caution” and impede doctors’ ability to make fair judgments in some cases. First reduce denial of treatment, then worry about whether damages need to be capped.

7. Drug costs must be reasonable. This may have to be legislated, with or without consent from the drug companies. They say they need high prices to fund research, but research funding can come from the taxpayer, from private institutions, or from tax incentives for research. And in fact, it often does already. The drug companies tend to spend more money on marketing than on research. It can also be mandated that any enterprise that sells drugs devote a certain percentage of its revenue to research (not counting market research). The situation is literally out of control, with one after another major corporate interest, including insurers, calling for some kind of reform that will reduce costs, make a sustainable business model more possible and not provoke the ire of the masses (as expressed through Congress and the courts).

8. If we use market dynamics to price healthcare, having also applied the 7 preceding points, then there must be significant attractive incentives for those providers who do the best job getting quality treatment for their contributors. A system well-planned is not patchwork, but applicable and effective, even if it looks like patchwork. It is ill-thought to split the debate between the irrationally simple “single-payer” paradigm and the recklessly haphazard all-private extreme. Neither is realistic and neither is in practice or near viable in the US market. Neither serves any purpose but to stoke ideological extremism on this issue and delay the crafting of a serious solution.

Meanwhile, hundreds of thousands of people die from medical mistakes, undertreatment or lack of coverage. Now that costs are crippling institutions at all levels, and the economic downturn and unwillingness of banks to lend, have converged to illustrate how functioning universal healthcare coverage is a mutual interest of major corporations, insurers, government and the people, we can agree on a starting point: it is necessary to make health insurance coverage, in one form or another, available to everyone; once we accept that, we can find ways to do it that are both cost-effective and sustainable for all stakeholders.